Investigate airport contracts

Legislators learned nearly three years ago about "dysfunctional" practices in the state’s Airports Division leading to the resignation of a high official. Now, the state auditor has released a report about the extraordinary scope of "questionable practices" during that period, fiscal 2009 and 2010, based on government documentation — but a broad investigation by the state attorney general is needed to determine whether prosecution is warranted. Such incompetence, costing at least $1 million of questionable work, may be just the tip of the iceberg and the public is entitled to know the fuller picture.

The auditor reports a pattern of "numerous procurement violations and instances of non-compliance" throughout the Department of Transportation’s Airports Division at least during those years. The recipient was California-based Parsons Transportation Group Inc., and the question is what the company offered state officials in return for lavish payment.

Brian Sekiguchi, who was hired as the division’s deputy transportation director in 2003 by then-Gov. Linda Lingle, resigned in August 2010 after he admitted to accepting free lodging at a home of a Honolulu-based airport engineering vendor during the 2009 Masters golf tournament in Augusta, Ga.

That conflict of interest was piddling compared to the auditor-unearthed sweet treatment of Parsons, which has a 12-year state contract valued at $90 million. That includes mostly the responsibility for Honolulu Airport’s modernization project. The company charged the highest possible rate for labor and billed the state for more than $1.2 million in questionable contract work.

Sekiguchi resigned after legislators found that the state had been paying $876,000 a year to sublease space in its own building near the airport where Parsons worked rent-free and — even crazier — was reimbursed for renovations. The state now charges Parsons rent at the building, according to current Transportation Director Glenn Okimoto.

The auditor’s report estimates that "the pattern of recurring violations and questionable practices" accounted for 30 percent of the department’s total procurements of $417 million of goods and $467 million of services during the two years examined.

That pattern, which persisted for several years in some cases, demonstrates the Airport Division’s "overreliance on contractors, outsourcing significant decision-making responsibilities to them while excessively accommodating their needs," according to the auditor. For example, the division paid to build a field office for $1 million, about 30 times more than it should have cost. Those are our tax dollars that airport staff squandered without doing their own construction cost analysis.

This outrageous situation brings to mind the Ewa Villages scheme in the 1990s, in which it was discovered that the city paid nearly $5.8 million to bogus moving companies owned by friends of city housing official Michael Kahapea, who was convicted for masterminding the scheme and handed a hefty prison term. In all, 11 people were charged in the case. One co-defendant entered a no-contest plea and was a key witness against Kahapea.

Gov. Neil Abercrombie has promised a "New Day" in improvement of projects. Spokeswoman Louise Kim McCoy said in a statement following the audit that improvements will include restructuring of the Transportation Department’s procurement process. All state departments will be directed "to meet those standards," she stated.

If followed going forward, that’s fine. But that should not allow the earlier airport work violations to be swept under the rug.

Acting state Auditor Jan Yamane says she thinks the Abercrombie administration has taken positive steps but plans to re-examine the division in 2016 to see whether reforms have been made as the airport modernization construction nears completion.

But between now and then — immediately, in fact — a thorough investigation is needed to decide whether charges for legal misconduct are appropriate.